Monday, January 21, 2008

BRUSSELS -(Dow Jones)- The euro-zone economy won't be directly affected by a slowdown in the U.S., European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Monday.

Speaking to reporters ahead of a meeting of the Euro Group - which comprises finance ministers from the 15 countries that share the single currency - Almunia also said the sharp declines in European stock markets Monday are "not good news."

A growing number of economists expect the U.S. economy to experience a recession this year as the housing market undergoes its worst downturn since the 1970s.

Asked by reporters if the slowdown will have an impact on the euro zone, Almunia replied "not directly."

"Our economies in the past were more dependent on the U.S.," he said.

U.S. President George Bush has laid out plans for a $150 billion package of measures designed to stimulate the economy, while the U.S. Federal Reserve is expected to continue to cut its key interest rate in the months head.

Almunia said he hoped those actions would help the economy avoid a recession.

"I hope that the measures that the U.S. administration and the Federal Reserve can adopt in the coming days can counter this risk of recession," Almunia said.

European stock markets plummeted Monday as investors began to gauge the impact on company earnings of a recession in the U.S..

"It seems the markets are considering the possibility of a more pronounced slowdown, possibly a recession, in the U.S.," Almunia said. "I hope they will become more quiet."